The Lempel-Ziv parsing scheme finds a wide range of applications, most notably in data compression and algorithms on words. It partitions a sequence of length n into variable phrases such that a new phrase is the shortest substring not seen in the past as a phase. The parameter of interest is the number Mn of phrases that one can construct from a sequence of length n. In this paper, for the memoryless source with unequal probabilities of symbols generation we derive the limiting distribution of Mn which turns out to be normal. This proves a long-standing open problem. In fact, to obtain this result we solved another open problem, namely, that of establishing the limiting distribution of the internal path length in a digital search tree. The latter is a consequence of an asymptotic solution of a multiplicative differential-functional equation often arising in the analysis of algorithms on words. Interestingly enough, our findings are proved by a combination of probabilistic techniques such as renewal equation and uniform integrability, and analytical techniques such as Mellin transform, differential-functional equations, de-Poissonization, and so forth. In concluding remarks we indicate a possibility of extending our results to Markovian models.